Study shows short-term loan products used to pay utilities, basic expenses, and rent

In August, the Center for Financial Services Innovation released a report on “small-dollar credit consumers”, which includes consumers who utilize payday lenders, pawn shops, auto title loans, and similar services. People who utilized these services reported being short on funds because living expenses consistently exceeded income; a bill or payment was due before pay day; or unexpected events such as emergency expenses or sudden drops in income.

One of the most striking findings in this report was the top three uses of these products. These services are used most often to pay: 1) utility bills (36%); 2) general living expenses (34%); and 3) rent (18%). RHLS and its special project, the Pennsylvania Utility Law Project (PULP) work every day to make the key expenses of utilities and housing more affordable. This report is particularly timely considering the ongoing controversy about the proposed expansion of payday lending in Pennsylvania.